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Volume 3 - Number 17 | September 6, 2005
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TOP STORY: LXP Looks to Invest New $500M Fund
By Michelle Napoli
Lexington Corporate Properties Trust will look to areas within the net-lease marketplace that it has not historically focused on for its latest institutional joint venture fund. Its fourth such fund, with an unidentified partner, will focus on both lower credit tenants as well as more specialized types of real estate, says co-chairman and chief investment officer Richard Rouse. He says the fund will start with $150 million of equity, and using an anticipated leverage of at least 70% will mean at least $500 million of buying power.
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INSIDER: New Tax Law Adds Complexity to Tax-Motivated Real Estate Transactions Involving Property Leased to Tax Exempt Lessees
By John G. Balboni and Joseph E. Ladocsi
When it's time to sell, many real estate owners face the prospect of paying tax on capital gains generated by appreciation in their property's value. Frequently, these owners seek to defer paying these taxes by entering into Section 1031 like-kind exchanges. As a matter of public policy, these tax-deferral benefits encourage owners to reinvest their sale proceeds in like-kind assets. However, Section 470 of the tax code—enacted as part of the Jobs Creation Act of 2004—dramatically impacts the availability of these tax-deferral benefits under certain circumstances.
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McDonald's: New Real Estate Strategy In the Works?
By Michelle Napoli
Speculation abounds about a possible real estate play for fast food giant McDonald's Corp., said to be the country's largest retail landlord. McDonald's has more than 30,000 restaurants in its worldwide system, about 70% of which are franchises; the Oak Brook, IL-based corporation owns much of its systemwide real estate, leasing sites to franchisees.
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CenterPoint Breaks Ground on 3.4M-SF Wal-Mart BTS
By Michelle Napoli
Industrial REIT CenterPoint Properties Trust has been tapped to build a mega-storage and distribution facility for the country's largest retailer in its CenterPoint Intermodal Center here. The Oak Brook, IL-based REIT's agreement with Wal-Mart Stores East LP includes a 15-year net lease plus 10 five-year renewals, with the lease being guaranteed by parent company Wal-Mart Stores Inc. Encompassing two buildings totaling nearly 3.4 million sf on 168.22 acres, the project's construction has begun and completion is anticipated for the second half of 2006.
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